Feb new home sales plunge 60% on lack of new launches

Singapore

NEW homes sales by developers plunged 60 per cent to 639 units in February from 1,609 in January in the absence of new project launches and the Chinese New Year holidays.

This contrasted sharply in January, where just one new project, the 1,862-unit Normanton Park - moved 625 units.

What is interesting is that amid the slower activity, some well-heeled buyers are showing a preference for city fringe locations, in particular, the Katong area which was where the old rich used to have their villas and mansions.

"Unsurprisingly, we saw a drop in the sales of new private homes in February, mainly due to the Lunar New Year festivities and a dearth of new project launches during the month," said Ismail Gafoor, PropNex CEO.

With no fresh launches last month, URA Realis data showed that developers sold 639 new homes (excluding executive condos) - representing a 60.2 per cent decline from the strong sales of 1,609 units in January, he said.

Compared to a year ago, February's new home sales were about 34.5 per cent lower than the 976 units shifted in February 2020.

The URA will release the monthly sales data on March 15.

February's lower sales were in stark contrast to the 1,609 units sold in January, said Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie.

"Rumours of new cooling measures sparked some panic buying at the beginning of the year as some buyers rushed to secure units for fear that their buying eligibility could be affected by new measures," she said.

"The property market turned more cautious in February as developers held back launches and the pace of sales slowed over the Chinese New Year period," she said.

"Both consumers and developers seemed to have taken heed of the government's advice to exercise greater prudence in light of the current macroeconomic uncertainties," said Ms Sun. Buyers could also have waited to see if the government will be announcing new policies during the Budget debate, she said.

Looking at the statistics, the month-on-month and year-on-year declines seem quite substantial but it may not be an entirely fair comparison, said Mr Ismail.

In January 2021, new launches Normanton Park and The Reef At King's Dock boosted sales volume, while in February 2020, The M in Middle Road witnessed overwhelming demand during its launch, he said.

"But if you consider February 2021, there weren't any new projects put on the market. In addition, many of the mega projects (for example, Treasure At Tampines, Parc Clematis, and Jadescape, et cetera) have been consistently paring down their unsold units and they will likely have less impact on lifting new home sales figures.

"On the whole, we do not think the lower sales in February signal any slowdown in the primary market," he said.

"Instead, it shows that new home sales are highly supply-led, with new projects stimulating demand and spurring transactions during the month of launch. Hence, with some new projects lined up - including Midtown Modern and The Atelier - we should expect the numbers to pick up in March," said Mr Ismail.

Amid the slower sales in February, wealthy buyers were plonking down serious money, particularly in the city fringe or what is officially called the rest of central region (RCR).

There were 11 homes sold in the S$5 million to S$10 million bracket, up from four in January.

Of the 11, five were located in the poshest core central region. The remaining six were in the RCR and outside central region (OCR).

Two units in Meyer House and two in Amber Park - both in Katong which is in the RCR - were among the 11.

There were two landed homes - in Cashew Green - sold above S$5 million; Cashew Green is in the OCR. The most expensive home sold last month was S$8.2 million for a Meyer House 308 sq m unit.

According to Ms Sun, more expensive non-landed RCR homes sales are getting popular. In 2019, there were 20 RCR homes costing more than S$5 million sold; this fell to 12 in 2020. So far in 2021, there have been four.

On Katong, Ms Sun said it is an area known for its rich Peranakan history and culture heritage.